Northern Breweries owes $253,000 in taxes Property could be up for tax sale this spring 0

The City of Sault Ste. Marie has registered a tax certificate against Northern Breweries Ltd.'s owner Leo Schotte in excess of a quarter of a million dollars for tax arrears owed the municipality.

The document, obtained last week by Sault This Week, by means of a Freedom of Information Request, was filed April 16, 2008.

Under the terms of the Municipal Act, if the cancellation price of $253,398.20 owed the City at the end of 2007 plus interest and accrued costs is not paid within one year of the registration date, the Bay Street brewery, closed since June 30, 2006, would be offered for public sale by sealed bids.

Besides the owner, a third party with an interest in the property, such as a mortgage holder, or creditor could offer to pay the tax arrears before the deadline, but would not own the building.

The municipality also could authorize an extension of the one-year time period to pay the cancellation price.

Chief administrative officer Joe Fratesi, explained Friday that the cancellation price includes the tax arrears owed the City, plus interest and other expenses. Fratesi said that once the tax certificate is registered, as in this case, the option of paying a portion of the taxes owed is no longer available.

If the City does not find a successful purchaser either before or in the event of a public sale, then it would have the option of "vesting" the landing and taking ownership of the property.

But Fratesi said that is not an option the municipality is exploring.

"The City is not in the real estate speculation business, and we have no plans for that property," he said.

Fratesi said the City had no interest in what could be an expensive demolition process or potential environmental clean-up of the prime Bay Street real estate.

"We just want our taxes paid," Fratesi said, "We'd prefer somebody to buy the building, and either tear it down and put up something new, or to fix the existing building for reopening as a brewery or something else."

Fratesi said that as far as he was aware, no one had stepped forward yet with an offer to pay the back taxes. But he said that if that were going to occur, it would more likely be closer to the April 16, 2009 deadline.

Fratesi said that if the property goes to a tax sale it would likely be as part of a "bundle" of other properties in the same situation, and that could happen a month or two after the April 16 closing date.

He did not suggest another alternative should the property not sell, or if the City were to decline ownership.

Northern Breweries owner Leo Schotte is facing also two charges of violations under the Environmental Protection Act in relation to a forced removal at public expense of ammonia within the vacant building ordered by the Ministry of Environment, and carried out by a Sudbury contractor in late April 2007.

Schotte is charged with failing to provide written documentation as required under the Act outlining "all measures to comply with Item 1 of the order"; and that he gave orally false information on or about April 2, 2007 in a statement to a provincial officer.

Schotte was absent for his first court appearance on the charges June 11, but is scheduled to enter a plea Dec. 3 in Provincial Offences Court.

Schotte was fined previously $100,000 after pleading guilty to violating the Environmental Protection Act after an ammonia leak at the Sudbury brewery in August 2006. The leak caused the evacuation of several blocks of the downtown area and forced medical treatment for some firefighters and police officers.

Ammonia is used in a gaseous state for refrigeration, and can pose serious or even fatal health risks if inhaled in high concentrations.

The removal of the ammonia from the Sault plant went without a hitch.

Since the Bay Street brewery ceased operations on June 30, 2006, former employees have not yet received a pension payment. There were about 24 full-time employees at the Sault plant at the time of its closure.

Cam Nelson, president of Local 2 of the Service Employees International Union, who represented unionized Northern Breweries employees in Sudbury and Sault Ste. Marie, did not return phone calls before deadline.

But in a Dec. 28, 2006 article in Northern Life, Nelson was reported as saying, "There's a lot of money owed and a lot of our employees had 30 years of service or close to it and obviously they're very concerned about their pension plan." Nelson had told Northern Life in the same article there were also outstanding issues for several employees about back pay and unpaid drug and dental benefits.

On Aug. 14, 2008, the Financial Services Commission of Ontario ruled that the Northern Breweries Pension Plan be wound up effective June 30, 2006 because the employer had failed to make contributions to the Pension Plan as required by the Pension Benefit Act.

In an earlier document dated June 27, 2008, FSCO noted that Northern had not made any contributions to the plan as required under the PBA since 2005.

The report added: "Northern also failed to make special payments owing to the Plan to meet a solvency deficiency as estimated by the Plan's actuary in the amount of $123,490.00 as at June 23, 2006."

Laura McLellan, a public affairs officer with FSCO in Toronto, apologized that no one was available before our Monday deadline to explain what the next steps in the process would be now that the Northern pension has been officially wound down.

But she guaranteed that someone would be available Tuesday to address those questions. For that update, see www.saultthisweek.com.